Members of Congress Reintroduce Legislation to Fix Outpatient Observation Status

March 14, 2019

Medicare requires a three-day inpatient hospital stay in order to qualify for care at a skilled nursing facility. Sadly, and all too often however, beneficiaries are classified as hospital outpatients on observation status. While outpatients on observation status and inpatients may receive the same care and services, for the same number of days or weeks, beneficiaries on observation status are not eligible for Medicare Part A coverage for their hospital or subsequent skilled nursing facility care. This unnecessary and arbitrary hurdle ultimately results in residents having to decide between high out-of-pocket costs or foregoing care at a skilled nursing facility.

To remedy this access barrier, Representatives Joe Courtney (D-CT), Glenn Thompson (R-PA), and Senator Sherrod Brown (D-OH) have reintroduced the Improving Access to Medicare Coverage Act of 2019 in Congress. The legislation is a bipartisan, bicameral solution that would require Medicare to count the time spent under observation status toward the three-day inpatient hospital stay requirement. As Representative Courtney notes in his press release, “three days is three days, and quibbling over semantics should not keep Americans from accessing the care they’ve been prescribed by health care professionals, or force them to go into medical debt in order to cover the cost.” Both consumer advocates and industry groups support the legislation.